Atlantic City insanity; Faith-based investing

Craziness is the order of the day in Atlantic City. Late last week, police conducted a search of the home, cars and person of Mayor Marty Small (D). The constabulary’s five-warrant raid followed hard upon charges against Atlantic City High School Principal Constance Days-Chapman (“Aunty Mandy” to the Small family) for alleged official misconduct, hindering apprehension of another, obstruction of justice and failure to report child abuse. It is therefore worth noting that Mrs. Small is one La’Quetta Small, the superintendent of schools for Atlantic City. Nepotism much? Days-Chapman was also campaign manager for Mr. Small, so we’re dealing with a very cozy circle of cronyism.

Mayor Small seems bent upon following in the inglorious tradition of such predecessors as Lorenzo Langford and confessed felon Frank Gilliam. Notes NJ.com, “As recently as 2007, four of the city’s last eight mayors had been arrested on corruption charges and one-third of the nine-member City Council was either in prison or under house arrest.” Seems the Boardwalk has a wee bit of an endemic corruption problem. Big Gaming is either very lucky or very prudent not to have been tarred with the same brush.

One city councilman (Mistuh Kurtz, he dead) responded by calling for even greater state governance of Atlantic City, which is the remit of the Department of Community Affairs. The state had no formal response. Hizzoner (below) held a press conference, which our Boardwalk correspondent recaps as follows: “Mayor Small stated … during heavy rain, he and his wife were taking his mother-in-law to their car for a medical appointment, when they were confronted by Atlantic County officers and told about the warrants. He stated they were not allowed to drive his mother-in-law anywhere. When he told them she needed medical treatment, they said they would get her an ambulance to take her. He declined that suggestion. (Why?)

It gets better. “Mayor Small then stated that 20 Atlantic County officers entered their home with guns, rifles, and battering rams. The investigation was apparently several months long. Small stated they didn’t steal any money from the city, the school district or the state. He also said they had no guns or drugs.” Later he would go on to say, “My daughter is not pregnant and has never been pregnant.” (WTF?) He then dismissed the entire scandal as “a family matter.” Perhaps in the sense that a Mob hit is a “family matter”?

Then there is the little matter of the “temporary” tax that Gov. Phil Murphy (D) levied in order to help New Jersey Transit cover a $767 million deficit. The “corporate transit fee” is as a “a surtax on highly profitable businesses,” so Big Gaming had better start lowballing those casino profits (again) in order to escape an impost on its travels. If your casino makes $10 million or more in profits, Gov. Murphy wants a 2.5% cut for the transit authority. The tax won’t be lifted until after Murphy leaves office, two years hence, dumping an unpopular issue on his successor’s desk. (Riders are also getting socked, in the former of a 15% fare hike.) By the way, it’s worth noting that neighboring Pennsylvania still has a “temporary” tax on liquor … one that was levied during the Second World War.

The New Jersey Monitor reports that NJ Transit’s budget is “a patchwork filled by fare revenue, diversions, and state subsidies.” Trenton will have its own problems soon, given billions of dollars of unfunded mandates in Murphy’s next two budgets. It’s no coincidence that Democratic legislators are looking at hitting up Big Gaming for exponentially higher iGaming and sports betting taxes. This, not the smoking ban, will be the real taste of the industry’s clout.

Casinos and racinos in the state of Ohio grossed $197 million last month. That was flat with 2023 but a soaring 27% higher than 2019. MGM Northfield Park‘s $26 million (+1%) led the state, which didn’t prevent MGM Resorts International from pulling the chicken switch and exploring a sale, which must have done wonders for morale. Hollywood Columbus posted the biggest gain (5.5%) to reach $22.5 million, while Hollywood Toledo was up 3% to $19 million. Somewhere in the middle was Jack Cleveland, which fell 5% to hit $21.5 million. Worst off was Scioto Downs, which faded 8% to $18.5 million. It was surpassed by Miami Valley Gaming, which made $20 million (+1%).

Other gainers were Belterra Park (pictured, $7 million, +4%), Hollywood Dayton ($13 million, +1%) and Hollywood Mahoning Valley ($14 million, +3%). A loser was Jack Thistledown, down 4% to $15 million. Cleveland denizens were avoiding their local casinos for some reason. Sports betting garnered an additional $66.5 million on handle of $658 million, with $28 million given away in promos. FanDuel was the revenue leader with $28 million, followed by resurgent DraftKings, narrowing the gap significantly with $24 million. ESPN Bet and BetMGM each brought in $3 million, while Caesars Sportsbook had to content itself with $1 million, as did Fanatics.

A certain failed casino owner can now add “failed media mogul” to his dubious resumé. Shares of novelty stock Trump Media & Technology Group plunged 21% yesterday (they still hover at an overpriced $51.34 per DJT share). How come? Suspiciously timed financials revealed that TMTG had posted a $58 million loss against $4 million in revenue. We know that the early going is rough sledding for online ventures (like sports betting, for instance) … but not this rough. However, Donald Trump retains his Midas touch for separating fools from their money. We’ll give him that much.